Last month, Elmer Stewart, the chairman, president, and CEO of Copper Fox Metals (TSXV: CUU ), a Canadian exploration and development company focused on Tier 1 copper projects in Canada and the United States, participated in an interview on “METALS 100” where he mentioned that The Van Dyke copper project is moving into the preliminary economic assessment (PEA) stage to the pre-feasibility stage.
The global economic and supply-demand landscape is undergoing structural changes. The era of financial assets enjoying a higher certainty premium is gone, and instead, the inflation center will rise again, macro fluctuations will intensify, thereby pushing up the certainty premium of physical assets. The super-cycle of commodities may be approaching gradually, with copper, which has good inflation resistance properties, set to encounter allocation opportunities.
The trend of copper prices since the beginning of this year seems to confirm this view. Despite the adverse background of a weakening Chinese market and a strengthening US dollar relative to other major currencies globally, copper prices have still risen by 17% since 2024. And just last week, copper prices surged to a two-year high and approached $10,000 per ton. At the same time, China’s refined copper imports have increased by 20% so far this year.
It is not difficult to imagine that copper mining ETFs have also surged this year. Global X Copper Miners ETF (NYSEARCA: COPX) has risen by 21.8% so far this year, while the smaller Sprott Copper Miners ETF (NASDAQ: COPP) has risen by 22.3%.
Copper as an asset has gradually become a sought-after asset in the mergers and acquisitions market. Recently, the world’s largest miner, BHP Group (NYSE: BHP), issued a takeover offer to Anglo American (LON: AAL), but requested the latter to first spin off its platinum and iron ore business in South Africa. It is evident that BHP is interested in the copper mining assets under Anglo American. If the transaction is successful, the merged company will become the world’s largest copper miner.
Wall Street also has a positive outlook on this metal. Copper remains the preferred base metal for Standard Chartered Bank in 2024, while Citigroup indicates that copper is entering its second secular bull market of the 21st century. This is being driven by growth in decarbonization-related demand, with Citigroup stating that only price increases can solve the issue of supply shortages. Citigroup analysts project that copper prices will rise to $12,000 in the next 3 months. Furthermore, Goldman Sachs has also set a 12-month target price of $12,000 for copper, based on the countdown stage of refined metal supply shortages in the copper market.
